The Federal Electricity Commission (CFE) plans to raise approximately US $1 billion through a share offering in CFE Capital, its financial subsidiary.
The objective is to attract capital from domestic and foreign investors to finance new transmission lines. The private investment will supplement the government funds budgeted to CFE.
CFE Capital operates through a structure similar to a real estate investment fund known as Fibra E, which allows investors to share in the revenue generated by infrastructure assets.
CFE Chief Financial Officer Eugenio Amador Quijano told Bloomberg Línea that officials will meet investors in New York early in November, with the intention to finalize the offering before the U.S. Thanksgiving holiday.
According to Quijano, the state-owned company aims to expand its electricity transmission network by nearly 7% during the current administration, compared to growth of less than 1% over the previous eight years. It also seeks to facilitate the integration of new power generation projects, including the 32 gigawatts planned by 2030.
The CFE considers the new lines necessary to connect power generation plants with consumption centers and to meet growing electricity demand.
In August, CFE Capital requested authorization from the National Banking and Securities Commission (CNBV) to conduct a follow-on public offering in Mexico, accompanied by an international private placement. This offering would be a new issuance, following the initial public offering (IPO) in February 2018, which raised 16.4 billion pesos (US $880 million).
However, the vehicle remained virtually inactive following its market launch, as the CFE did not subsequently expand its portfolio of transmission assets or carry out any new offerings. Over time, liquidity declined, and ownership ended up primarily in the hands of Mexican pension funds.
For this new transaction, the CFE aims to place approximately one-third of the securities with foreign participants.
If the new operation goes through, the transaction would be the largest public offering of shares in Mexico since 2020, Bloomberg reported.
The projected capital raising is part of a broader strategy. According to the Energy Ministry, the CFE’s strengthening and expansion plan includes investments totaling nearly US $37.5 billion.
Within that program, the transmission segment accounts for approximately US $6.9 billion through 2030, of which nearly US $2.5 billion would be channeled through CFE Fibra E.
The $1 billion currently envisioned would, therefore, represent a portion of the required financing.
